2019 (12) TMI 1294 - AT - Income Tax

Depreciation on electric installation - @10% OR 15% - Whether electrical installation is an integral part of the plant and machinery - HELD THAT - As relying on assessee s own case 2018 (5) TMI 1988 - ITAT SURAT assessee is eligible for depreciation @15% instead of 10% allowed by the ld.Assessing Officer(AO) accordingly the AO is directed to allow deduction of depreciation as mentioned above - Decided in favour of assessee.

Summary

Issues:
Challenging the order of Ld.Commissioner of Income Tax(Appeals) in restricting depreciation on electric installation to 10% instead of 15%.

Analysis:
The appeal by the Assessee was against the order of Ld.Commissioner of Income Tax(Appeals) for the assessment year 2012-13. The grounds raised by the assessee primarily focused on the depreciation on electric installation being restricted to 10% instead of the claimed 15%. The dispute revolved around the action of the Deputy Commissioner of Income Tax and the confirmation of the addition to the income of the Appellant. The assessee challenged the initiation of penalty proceedings under section 271(l)(c) of the Income Tax Act, 1961. The Tribunal considered the facts of the case, where the assessee had filed its return of income declaring total income at Rs. Nil, and the assessment was completed with various additions/disallowances by the Assessing Officer.

The Tribunal referred to a previous decision in the assessee's own case for the assessment year 2011-12, where a similar issue was resolved in favor of the assessee. The Tribunal noted that the issue was squarely covered by the previous decision, and the assessee was eligible for depreciation at the rate of 15% instead of 10% allowed by the Assessing Officer. The Tribunal directed the AO to allow the deduction of depreciation as claimed by the assessee. The decision was based on the principle that the electrical installation was an integral part of the plant and machinery, warranting the higher depreciation rate.

The ld.CIT-D.R. relied on the orders of Lower Authorities, but the Tribunal found that the issue was already settled in the assessee's favor in a previous decision. After considering the arguments and judgments cited by both parties, the Tribunal concluded that the assessee was entitled to depreciation at 15% instead of 10%. Consequently, the appeal of the assessee was allowed, and the AO was directed to allow the depreciation as claimed. The Tribunal pronounced the order in favor of the assessee on 13-12-2019.